THE KANGRA CO-OPERATIVE BNAK LTD.,NEW DELHI vs. DCIT CIRCLE-62(), DELHI

Appellant/assessee preferred appeal before Learned CIT(A) which was dismissed vide order dated 26/06/2024.

Being aggrieved appellant/assessee preferred present appeal.

Learned Authorized Representative for appellant/assessee submitted that Learned CIT(A) erred in confirming the additions of Rs.7,03,244/- made by Assessing Officer on account of disallowance of expenses for EPF, late deposit. A fire occurred in the office of the appellant on 30/06/2018 and all the records were burnt. It took time to retrieve the records. Any how the EPF Contribution was deposited during the financial year itself i.e., before submission of Income Tax Return on 31/10/2019. Reference to Diary report from Police Station, Janak Puri dated 2nd July, 2018, Copy of Fire report issued by the Divisional Fire Officer dated 6th July, 2018. Copy of newspaper “Punjab Kesri” dated 3rd July, 2018, publishing news of fire happening. Appellant/assessee could not deposit the EPF due to the circumstances beyond its control, as there was fire in the office of the appellant and EPF was deposited during the assessment year itself after retrieval of records. Staff EPF

Learned Authorized Representative for appellant/assessee submitted that Hon'ble Income Tax Appellate Tribunal ('ITAT'), Delhi Bench in case of FIL India Business & Research Services (P.) Ltd. v. Deputy Commissioner of Income-tax ([2023] 154 taxmann.com 251) has held that Appellant/Assessee could not be penalized with addition on the account of delayed deposits when Assessee had initially deposited employee contribution before the prescribed due date but due to the glitches on the portal such amount was reversed by Bank. The relevant extracts of the judgment are provided below: '8. We are therefore of the view that when the assessee had initially deposited the employees dues before the prescribed due dates but due to the glitches at the end of the respective authorities, the amounts were reversed by the bank, then the assessee cannot be penalized with the addition on account of delayed deposits......' 7. Learned Authorized Representative for the Department relied on the order of Learned CIT(A). 8. From examination of record in light of aforesaid contention, it is crystal clear that Learned CIT(A) confirmed addition of Rs.7,03,244/- by Learned AO on account of disallowance of expenses for EPF, late deposit. Staff EPF contribution amounting to Rs.7,03,244/- for the month of June, 2018, was deposited by the appellant/assesse on 03/08/2018 i.e., after the due date of 15/07/2018 prescribed under EPF Act. As per Diary report from The Kangra Co-operative Bank Ltd. vs. DCIT Police Station, Janak Puri dated 02/07/2018, it is evident that a fire took place on 30/06/2018. Copy of fire report issued by Additional Fire Officer dated 06/07/2018 and copy of news paper “Punjab Kesri” dated 03/07/2018 in the office of appellant/assesse all the records were burnt. After retrieving record EPF was deposited during the Financial Year itself.

In view of the above materials facts specially the incident of fire beyond the control of appellant/assesse and well settled principle of law that the assessee cannot be penalized for delay beyond his controls. The addition of Rs.7,03,244/- is not just, fair and reasonable. Therefore, the impugned orders are set aside.

In the result, the appeal filed by the assessee is allowed. Order pronounced on this day 29th November, 2024.